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Office of the Inspector GeneralThe Library’s Office of the Inspector General (OIG) was established in 1988 as anon-statutory office deriving its authority from the Librarian of Congress. OIGbecame statutory with the passage of the Library of Congress Inspector General Act of 2005(2 U.S.C. § 185), with a mandate to independently: conduct and supervise audits and investigations of fraud, waste, and abuserelating to the Library; lead, coordinate, and recommend policies to promote economy, efficiency,and effectiveness; and keep the Librarian of Congress and the Congress fully and currentlyinformed about problems and deficiencies relating to the administrationand operations of the Library.At the end of 2019, the Library of Congress Inspector General Act was amended for thefirst time since its enactment, giving the office, increased parity with Executive BranchIGs, statutory law enforcement authority, and defined independence with respect tobudget and hiring.Through the Council of Inspectors General on Integrity and Efficiency (CIGIE), weare part of a community of Inspectors General, who collectively oversee operationswith the Executive and Legislative branches. In the years to come, we look forward tocontinuing our efforts to provide independent and effective oversight, such as throughour Semiannual Reports to Congress as required by the Inspector General Act.Every six months we provide Congress with this report detailing our independentoversight of the Library. The semiannual report presents information on: the Library’s top management challenges; significant audits, investigations, and other activities of the OIG; OIG’s review of legislation and regulations affecting the Library; and Library decisions on OIG recommendations and the status ofimplementation, along with any resulting monetary benefits.WONDROUS WOMENOF COMICSA curator's picks:Library Serials Reference Specialist and Kluge Staff Fellow, Megan Halsbandshares a few of her favorites from the Library's collections of over 140,000comic books. Originally appeared in the Library of Congress Magazine September/October 2017 edition.(see following pages 4 - 7)3 SEMIANNUAL REPORT TO CONGRESS

1.2.The Audits Division conducts in-depth reviews that address the efficiency, effectiveness, and economy of the Library’s programs, activities, and functions; providesinformation to responsible parties to improve public accountability; facilitates oversight and decision-making; and initiates corrective action as needed.The Audits Division also contracts with an independent public accounting firm thatexamines whether financial statements fairly present financial positions, results ofoperations, and budgetary resources. The firm also assesses whether the Library andother entities have adequate financial reporting internal control systems that complywith applicable laws and regulations. OIG reports are available at www.loc.gov/about/oig.The Investigations Division addresses alleged or suspected wrongdoing by agencyemployees, contractors, or others responsible for handling federal resources. Violations of Library regulations or fraud committed against the Library can result in administrative sanctions and criminal or civil prosecution. Contact information for theOIG Hotline is located on the inside back cover of this report.SEPTEMBER 2020 4

Top Management ChallengesOIG assesses certain top management challenges for each semiannual report. Forthis report, we assessed Contracting. The Library has six other top managementchallenges: Strategic Planning and Performance Management. Many of the Library’smanagement challenges over the years have flowed from a historic lack ofproper strategic planning and performance management. Digital Strategic Planning and Execution. A more strategic approachto digital services and collections is necessary because of the pace of digitalinnovation and the need for the Library to act on many fronts to execute atimely and cost-effective digital transformation. IT Modernization. The key to the Library successfully developing amodern IT environment is the Office of the Chief Information Officer(OCIO) using a strategic approach to improve its IT governance, establishing accountability for IT investments, implementing well-designed,secure, and business-driven networks and computing facilities, andemploying IT best practices. Collection Services Workflow. The Library needs to broaden its capabilityto perform end-to-end monitoring of its collections services workflow inorder to better manage its arrearage and number of items collected andstored. We identify Library Services' collections storage activities as beingpart of a supply chain of processes that include selection, digitization,preservation, and storage services, among other processes. U.S. Copyright Office's Modernization Program. In fiscal year (FY)2018, OCIO and the U.S. Copyright Office (USCO) initiated a joint effortto develop a future-state version of USCO's IT system as part of USCO'slarger modernization program. The program poses a top managementchallenge because of the complexity, magnitude, and importance of theprogram to fulfilling USCO's mission. Financial Management and Reporting. A reliable system of internalcontrols over financial reporting is vital for an agency to accurately andreliably report on its financial transactions and position. We are monitoringthe Financial Services Directorate’s progress in strengthening its financialmanagement and reporting processes.CONTRACTINGThe procurement function managed by the Library’s Contracts and Grants Directorate(CGD) in the Chief Operating Officer (COO) service unit has been a long-standingtop management challenge. However, in light of our recent review, we are pleasedto announce that we are removing it as a top management challenge. In recent years,5 SEMIANNUAL REPORT TO CONGRESS

3.4.the Library has made steady improvements in the contracting area. In our February2018 report – Incremental Improvement Has Been Made to Modernize the Office of Contractsand Grants Management – we found that Library management had made incrementalprogress but not attained a truly modernized operation, although CGD had a plan toimprove performance and address our audit findings and outstanding recommendations. In our most recent August 2020 report – Follow-up Audit of the Contracts andGrants Directorate – we determined that CGD created a plan following good businesspractices and had made significant progress in addressing operational, human capital,and internal control weaknesses to the extent that it merited removing the procurementfunction from our list of the Library’s top management challenges. In the following,we describe the steps taken by the Library to address our prior recommendations andreach this important milestone.Creating Strategic Goals and Performance MeasuresWe recommended that COO develop the strategies and tactics to accomplish short-,mid-, and long-term strategic goals for improving the procurement function alongwith valid and reliable performance measures. We also recommended that COOSEPTEMBER 2020 6

5.6.7.and CGD use the Project Management Institute’s Project Management Body ofKnowledge (PMBOK) best practices to develop and implement a project plan witha critical path for achieving the goals and addressing our past recommendations thatwere outstanding. In response, CGD created, or assisted in creating, several strategicplanning documents. For example, CGD’s Plan to Improve Contracting for FY 18 – FY 19(Plan) identified short-, mid-, and long-term goals, as well as performance measures,and COO’s April 2018 Project Plan for Acquisitions outlined CGD’s critical path to completing the remaining items in fulfillment of the goals.Creating and Implementing a Human Capital Workforce PlanWe recommended that COO work with CGD and the Human Capital Directorate(HCD) to develop a strategic workforce plan for the procurement function usingPMBOK's best practices and focus on improving human capital-related metrics, suchas reducing average vacancy terms and attrition. We also recommended that HCDexpedite its efforts to fill certain key CGD vacancies. In response, COO and CGDtook steps that represented the development of a strategic workforce plan with metricsand, with HCD’s assistance, filled the key vacancies.Strengthening Financial Management ControlsTo ensure the reliability and accuracy of contract and related financial data, we recommended a full evaluation of the internal control design of the Legislative BranchFinancial Management System’s (LBFMS) acquisition module; LBFMS is more7 SEMIANNUAL REPORT TO CONGRESS

commonly known as Momentum. Specifically, we recommended the developmentand installation of a daily automated reconciliation process for balancing contract/task order open obligations by number and amount between Momentum’s acquisition and financial modules. CGD performed the evaluation, which was part of anupdate to a prior analysis performed in November 2014; the analysis resulted in 22recommendations, six of which were specific to the module’s internal controls. CGDhas been working to implement them and we recommended that CGD continue withthese efforts. We also determined that the Financial Services Directorate was runninga daily automated reconciliation.Developing and Implementing a Quality Assurance ProcessWe recommended that CGD’s policies and procedures require quality assuranceprocesses for verifying that all systems are operating as designed and compliance isadequate. Specifically, we recommended that CGD obtain assistance from catalogingand systems experts within the Library to design and install a contract file management process that appropriately tracks contracts files. We also recommended thatCGD develop quality assurance program performance metrics. CGD revised andimplemented new file management and quality assurance standard operating procedures and quality assurance processes that were responsive to our recommendation.The processes were designed to ensure the completeness of contract documentationand consistency between the Momentum system data and the hard-copy contractfiles. CGD also obtained assistance from a research librarian to design and developa file management process that appropriately tracks contract files. CGD developedperformance metrics for its quality assurance program to track the defects identified.WONDROUS WOMEN OF COMICS(see previous pages 4 - 7)1. All Star No. 8 (December 1941/ January 1942) Though this issue features the Justice Society of America, it is best known for thefirst appearance of Wonder Woman, created by William Moulton Marston. Wonder Woman has undergone many changes toher powers and her costume during the last 75 years, yet has remained a feminist icon for readers around the world. Copyrightpermission DC Comics.2. Marge's Little Lulu No. 25 (July 1950) First appearing in 1935, Little Lulu, created by pioneering cartoonist Marjorie HendersonBuell, was an independent girl who broke gender stereotypes in the male-dominated comic stories of the day. Copyright permission Dell Comics.3. Captain Marvel No. 1 (1989) Monica Rambeau was the first woman to be known as Captain Marvel. Along with Butterfly,Storm and Vixen, Monica Rambeau was an early black female superhero, and one of the first to have her own title. Copyrightpermission Marvel.4. Batgirl No. 1 (April 2000) Cassandra Cain, daughter of assassins David Cain and Lady Shiva (Sandra Wu-San), takes up therole of Batgirl in this series. Initially mute and illiterate, Cassandra is later trained by both Barbara Gordon (Batgirl/Oracle) and Batman. Copyright permission DC Comics.5. Princeless (2013) Princeless tells the story of Princess Adrienne, a strong brave black girl who questions traditional princessstereotypes by not only rescuing herself, but by setting out to rescue her sisters. Copyright permission Action Labs Comics.6. Ms. Marvel No. 1 (April 2014) Kamala Khan a Muslim-American teenager, becomes Ms. Marvel after Carol Danvers assumesthe role of Captain Marvel. Co-created by Sana Amanat, who is Pakistani-American, this new series is redefining what itmeans to be a superhero. Copyright permission Marvel.7. Princess Leia No. 1 (May 2015) Despite being one of the most famous female characters in science fiction, this is the first eponymous series for Princess Leia, who has been a featured character in Star Wars comics since 1977. Copyright permission Marvel.SEPTEMBER 2020 8

Audits, Evaluations, and ReviewsThe Library Continues to Face Challenges Ensuring EffectiveFinancial Management and ReportingReport No. 2019-SP-101May 2020As part of a series of reports on the Library’s progress in addressing its top management challenges, OIG conducted an evaluation to assess the progress made by theLibrary in addressing the material weakness, significant deficiencies, and noncompliance with laws and regulations reported by the independent public accountants during their FY 2017 Library financial statements audit. The scope of the evaluationincluded the results of the Library’s FY 2018 and 2019 financial statements audit.We determined that incremental progress has been made since the FY 2017 financialstatements audit and that more time is needed for the Library to implement robust financial management and reporting controls and procedures. In addition, the Libraryfaces challenges with implementing a robust IT cost accounting methodology. Further Library progress partially depends on the Financial Services Directorate havingadequate funding and well-trained human capital resources to ensure that correctiveactivities continue.Library management agreed with all of our recommendations. The Library intendsto expand on various initiatives through FY 2023 that focus on assessing and implementing more effective and efficient financial management and reporting throughimproved business processes and technologies as well as continued optimization ofits workforce.Results of the Library of Congress' FY 2019 Financial Statements AuditReport No. 2019-FN-101May 2020OIG contracted with Kearney to audit the Library’s financial statements for FY 2019.For the twenty-fourth consecutive year, the Library received an unmodified (clean)opinion on its financial statements. In the auditor’s opinion, the financial statementswere fairly presented, in all material respects, in conformity with U.S. generally acceptedaccounting principles. The auditor reported a significant deficiency regarding theLibrary’s complex and untimely financial reporting process. The auditor also foundno instances of noncompliance with laws and regulations or other matters that wererequired to be reported in accordance with U.S. generally accepted governmentauditing standards. As of our September 2018 Semiannual Report to Congress, OIGhas identified Financial Management and Reporting as a top management challenge.9 SEMIANNUAL REPORT TO CONGRESS

Results of the Library of Congress' FY 2019 Fiduciary Fund FinancialStatements AuditReport No. 2019-FN-103June 2020OIG contracted with Cotton & Company (Cotton) to audit the Library's fiduciary fundfinancial statements as of and for the fiscal years ending September 30, 2019 and 2018,and to provide a report on internal control over financial reporting and compliancewith laws and other matters.Cotton reported that the financial statements were fairly presented, in all materialrespects, in conformity with U.S. generally accepted accounting principles; there wereno material or significant weaknesses in internal controls over financial reporting; andthere was no reportable noncompliance with provisions of laws tested or other matters.Follow-up Audit of the Contracts and Grants DirectorateReport No. 2020-PA-101August 2020OIG contracted with Cotton to perform a follow-up audit of select recommendationsmade from the February 2018 report on CGD (Report No. 2016-PA-101). A series ofOIG reports dating back to 2002 document weaknesses that have beset the Library’scontracting function. Contracting was first identified as a top management challengesince OIG began reporting them in September 2011.Based on the results of Cotton’s follow-up audit and prior audits preceding it, OIGhas determined that the Library has made significant progress in addressing operational, human capital, and internal control weaknesses to merit removal of Contractingfrom the Library’s list of Top Management Challenges. Cotton did not make anyrecommendations.all comic-strip drawings must functionas diagrams, simplified picture-wordsthat indicate more than they show.— Art SpiegelmanAmerican cartoonist, editor, and Pulitzer-Prizerecipent for Maus: A Survivor's TaleSEPTEMBER 2020 10

Other Audits Division ActivitiesResults of the Open World Leadership Center FY 2019 FinancialStatements AuditReport No. 2019-FN-104May 2020The Open World Leadership Center (Open World) hosts emerging political and civicleaders from post-Soviet countries through its congressionally-sponsored exchangeprogram. Librarian Carla Hayden sits on Open World’s Board of Trustees.Through an interagency agreement, OIG supports the effort of Open World byproviding oversight of the contract with the independent public accounting firm ofKearney & Company, P.C. (Kearney) to audit Open World’s financial statements forFY 2019. The auditor found that the financial statements were fairly presented, in allmaterial respects, in conformity with U.S. generally accepted accounting principles. Theauditor also examined internal controls over financial reporting and did not identify anyreportable conditions. The auditor also found no instances of noncompliance withlaws and regulations or other matters that were required to be reported in accordancewith U.S. generally accepted government auditing standards.Overseas Field Office Replacement SystemIn April 2020, we reported system development issues related to an Overseas FieldOffice Replacement System (OFORS) review that extended beyond the scope ofour November 2019 audit of the Rio de Janeiro field office (Report No. 2018-PA101). These issues covered a broad period of time; involved Library Services andother parties, including OCIO and the Financial Services Directorate; and relatedto Library management’s response to our OFORS recommendations made in ourFebruary 2017 report (FY 16 Review of System Development Life Cycle; Report No. 2016IT-102). We noted that Library Services needs to strengthen its program and projectmanagement of IT

Division and the Serial and Government Publications Division at the Library of Congress. * Due to the coronavirus pandemic, all Library of Congress buildings and facilities are closed to the public, including exhibitions. This exhibit is accessible online. Cover Images